High-Potential Marijuana Stocks
In an industry chock full of potential, it can be difficult parsing out which companies have the highest ceilings. After all, almost every major marijuana company has experienced one period or another of intense growth.
But when it comes to the best high-potential marijuana stocks, the pot stocks on the Nasdaq may be the best situated to see huge gains—and also the most likely to suffer severe falls.
You see, the history of marijuana on the Nasdaq has been a short one. The first pure-play marijuana company to land on the exchange was Cronos Group Inc (NASDAQ:CRON) in the first half of 2018, back when marijuana stocks first began listing on major U.S. exchanges.
While most of the companies chose to list on the New York Stock Exchange (NYSE), a couple more pure-play marijuana stocks followed Cronos Group’s lead.
The first to follow Cronos was Tilray Inc (NASDAQ:TLRY), which listed on the Nasdaq in July 2018.
But there was one very important distinction between Tilray and Cronos: TLRY stock made its initial public offering (IPO) on the Nasdaq. CRON stock, by contrast, was added to the Nasdaq after having already been listed on Canadian exchanges. This has led to a radical difference in fates for the two companies, which I’ll elaborate on below.
Finally, we have the newest comer to the party, OrganiGram Holdings Inc (NASDAQ:OGI). Having just listed on the exchange, OrganiGram Holdings is the smallest company of the three by market cap; it’s less than a third the size of Tilray and only a bit more than a quarter the size of of Cronos Group.
In fact, OGI stock is the first marijuana penny stock to list on the Nasdaq.
With these three stocks in mind, you have a complete picture of what the exchange has to offer when it comes to pure-play marijuana stocks.
I keep mentioning “pure-play marijuana” because companies like GW Pharmaceuticals PLC (NASDAQ:GWPH) operate in the marijuana space but I wouldn’t categorize them as strict marijuana stocks.
What’s important to remember about the Nasdaq is that it is traditionally known for holding tech stocks and stocks of other high-volatility industries. We’ve seen that play out in the marijuana industry thus far, with CRON stock and TLRY stock usually being more volatile compared to their NYSE rivals.
Increased volatility is a double-edged sword, of course. More extreme swings mean higher highs but also lower lows.
As such, these three companies arguably have higher potential for short-term stock gains than others, based on the history of marijuana stock performances on the Nasdaq.
Before we proclaim one of these companies superior to the other, we should evaluate each by its own merit.
Chart courtesy of StockCharts.com
TLRY Stock Prediction
As seen in the above chart, each Nasdaq pot stock has taken a very different path over the last year, although one thing they all share in common is big gains.
But one of the companies is clearly the outlier in that those gains were front-heavy, with its stock declining precipitously over the past year. That company is Tilray Inc.
When Tilray first landed on the Nasdaq, the IPO fervor was enough to jump-start trades into overdrive and send the stock soaring, seeing as high as 1,000% gains in days.
But such massive spikes in value without much in the way of concrete support are bound to fail eventually, and that’s what we’ve seen lately: a long, steady descent to what TLRY stock’s true valuation is.
Unfortunately, we’re still not there, and I anticipate further falls to come.
While there is potential within this company—it wouldn’t have risen so high in the first place if there was absolutely no promise—it will have a long way to climb before it can retake a position anywhere near its old highs.
As such, I would pass on TLRY stock, at least in the near term.
CRON Stock Prediction
The strongest performer of the Nasdaq pot stocks by far over the past year has been Cronos Group Inc. Nearing 150% gains over the past year, this stock was once one of the more unpredictable ones in the marijuana industry.
While its NYSE cohorts generally followed similar trends, CRON stock always seemed to go its own way, usually negative, until it scored a partnership with “Big Tobacco” by way of Altria Group Inc (NYSE:MO), makers of “Marlboro” cigarettes.
The billion-dollar deal sent Cronos share prices roaring upward, with most of the gains coming at the beginning of 2019.
The deal was by far Cronos Group’s strongest move so far, and it will be interesting to see how the company follows it up.
Meanwhile, the company’s numbers in its financial reports have been fairly strong, putting it in a good position to see gains for years to come. While I don’t think Cronos Group is in as strong of a position as, say, Canopy Growth Corp (NYSE:CGC), the company is still very impressive and its shares will likely continue to yield gains for investors.
OGI Stock Prediction
Now on to the youngest Nasdaq marijuana stock of the three, OrganiGram Holdings Inc. OGI stock is new to the Nasdaq, sure, but I’ve been covering OGRMF stock for over a year, and the company has never failed to impress.
It has a strong price-to-earnings ratio that has long placed it among the few marijuana stocks considered to be undervalued.
Being a marijuana penny stock means that growth can come hard and fast, whether through a strong deal, an acquisition, or powerful financial numbers.
Its first quarterly report in 2019, in fact, was so strong that it sent many other marijuana stocks rising due to the massive growth in sales that came as a result of Canadian marijuana legalization.
Putting all that together makes OGI stock one of the most potential-laden stocks in the pot industry.
I predicted that OrganiGram Holdings would hit a major stock exchange in 2019, and I was right.
The stock has seen huge growth so far this year; I called that, too. I’ve been pretty accurate in my readings of OGI stock so far and I believe that the future will hold more gains for the stock.
In fact, I believe that OrganiGram probably has the highest potential in the entire pot industry right now due to its size, its place on the Nasdaq, and its financial success so far.
While there’s no fundamental difference between the Nasdaq marijuana stocks and the NYSE marijuana stocks, there is a clear divide in their fortunes so far.
Far more volatile and riskier, the Nasdaq marijuana stocks are high on potential for investors who are willing to stomach the added risk.